BusinessDay

Metaverse value to hit $8trn by 2030, with five billion users

A recent report by Citi Global Perspectives & Solutions shows that the estimate of the total addressable market (TAM) for the metaverse economy could grow to between $8 trillion and $13 trillion by 2030, and a potential range of users of up to five billion.

Also, a device-agnostic Metaverse accessible via PCs, (personal computers), game consoles, and smartphones could result in a very large ecosystem.

Mike Wadhera, the founder of Teleport, noted as early as 2016 that the “Information Age” was transitioning into the “Experience Age.” The Metaverse represents one compelling vision of this shift toward experiences.

Although it is often associated with immersive Virtual Reality (VR) and Augmented Reality (AR), experts say that they are not essential.

Metaverse as the next generation of the internet will combine the physical and digital worlds in an immersive manner. This will include everything used by the internet for today with gaming, commerce, art, media, advertising, smart manufacturing, health care, virtual communities, and social collaboration, among others.

Other experts including Goldman Sachs have also made the same predictions. “We look at the digital economy today, which is roughly about 20-25 percent of the global economy. We see the digital economy continuing to grow, and on top of that we see a virtual economy that will grow within and alongside this digital economy. That’s how we came up with the number for various outcomes of anywhere from $2 trillion to $12 trillion, with $8 trillion at the midpoint of all potential outcomes,” Sachs said.

Similarly, the metaverse could potentially use virtual reality, or augmented reality, to immerse users in an alternate world. Although the technology is still being developed, companies like Meta say they are building and improving these devices. Meta’s Oculus Quest, now in its second model, is one such device.

Read also: How 5G network will reduce unemployment, boost metaverse adoption in Nigeria

While the metaverse does not have one definition peculiar to it, “the beauty of the Metaverse as a narrative or a meme is the fact that it can be interpreted in different ways. Many people get hung up on the belief that in order for the Metaverse to exist, VR must be fully commoditized and widely spread. This means, everyone will need to own a VR device that they use to connect into a fully-immersive 3D world, or walk around the High Street with AR glasses. While this will happen, it is not a prerequisite for the Metaverse,” Jamie Burke, Founder and CEO of Outlier Ventures, said.

In the current state, the internet infrastructure is unsuitable for building a fully-immersive content streaming metaverse environment, that enables users to go seamlessly from one experience to another. However, to make the vision of Metaverse a reality, experts say they expect significant investment in a confluence of technology.

This includes low latency, which is the time it takes a data signal to travel from one point on the internet to another point and then come back, which is critical to building a more realistic user experience. With only 25 percent of the global population expected to have access to 5G by 2025, network bandwidth is expected to be increased and delivered.

75-150 milliseconds (ms) round-trip time latency for video calling or cloud gaming, sub 30ms latency for multiplayer, complex games, and sub 12ms latency required for truly immersive metaverse experience, the report shows.

In a recent report, Haim Israel, Bank of America’s strategist, said that the metaverse is a massive opportunity where cryptocurrencies will be widely used as currencies. This translates to the metaverse of the future likely to encompass more digitally-native tokens, but also embed traditional forms of money.

Money in the metaverse could exist in different forms, in-game tokens, stablecoins, central bank digital currencies (CBDCs), and cryptocurrencies. Experts say that current payment rails are usually domestic for real time and expensive cross-border payments making them an imperfect fit for a borderless global metaverse ecosystem. However, decentralized finance (DeFi) and existing traditional financial systems are being expected.

While the metaverse is one, there will be different operations. The report highlights that if most users access the metaverse via a mobile phone, the operating system (OS) will be the same. Consumer hardware manufacturers will be portals to the metaverse and potential gatekeepers.

Similar to today, there will likely be a split between a U.S./international and a China/firewall-based metaverse. Furthermore, there will also likely be a spectrum based on technology and business model. For example, metaverse centralization versus decentralization.

According to the report by Citi, taking a narrower definition, based on VR headsets, the Metaverse TAM is expected to be only around 200 million to 250 million users by 2030. AR is predicted to be more widespread given its less-invasive user experience compared to VR, and to be in the range of 700 million to 775 million users.

In 2030, the total number of AR and VR users is expected to be 900 million to one billion.